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Boston University School of Law

Faculty Scholarship

2021

Climate change

Articles 1 - 2 of 2

Full-Text Articles in Law

Market Myopia's Climate Bubble, Madison Condon Mar 2021

Market Myopia's Climate Bubble, Madison Condon

Faculty Scholarship

A growing number of financial institutions, ranging from BlackRock to the Bank of England, have warned that markets may not be accurately incorporating climate change-related risks into asset prices. This Article seeks to explain how this mispricing can exist at the level of individual assets drawing from scholarship on corporate governance and the mechanisms of market (in)efficiency. Market actors: 1. Lack the fine-grained asset-level data they need in order to assess risk exposure; 2. Continue to rely on outdated means of assessing risk; 3. Have misaligned incentives resulting in climate-specific agency costs; 4. Have myopic biases exacerbated by climate change …


Mandating Disclosure Of Climate-Related Financial Risk, Madison Condon, Sarah Ladin, Jack Lienke, Michael Panfil, Alexander Song Jan 2021

Mandating Disclosure Of Climate-Related Financial Risk, Madison Condon, Sarah Ladin, Jack Lienke, Michael Panfil, Alexander Song

Faculty Scholarship

Climate change presents grave risk across the U.S. economy, including to corporations, their investors, the markets in which they operate, and the American public at large. Unlike other financial risks, however, climate risk is not routinely disclosed to the public. Insufficient corporate disclosures have persisted despite the Securities and Exchange Commission’s (“SEC”) issuance of regulatory guidance on the topic, the emergence of voluntary disclosure frameworks and standards, and growing calls from major investors for improved disclosure. Given the inadequacy of the current regime, the SEC should take further action to fulfill its statutory mandate to protect investors and promote efficiency, …